Why Should CIOs Consider Advanced Analytics?
Advanced analytics, a growing trend in the enterprise and often referred to as a subset of big data, is a future-oriented analytics that creates more precise models to drive change and improve business performance. Experts believe it is set to make a mark in the coming years, as organizations are increasingly looking at advanced analytics that allow them to use large volumes and diverse types of data to discover patterns and anomalies and predict outcomes.
According to research firm Gartner, advanced analytics is the fastest-growing segment of the business intelligence (BI) and that analytics software market surpassed $1 billion in 2013.
“While advanced analytics have existed for over 20 years, big data has accelerated interest in the market and its position in the business,” says Alexander Linden, research director at Gartner who adds that instead of being the domain of a few select groups (for example, marketing, risk management etc.), many more business functions now have a legitimate interest in this capability to help foster better decision making and improved business outcomes.”
It’s Future that matters
Experts believe it is no longer sufficient for businesses to understand what has happened in the past, rather it has become essential to ask what will happen in the future, to anticipate trends and to take action that optimize results for business, explains Daniel Kirsch Hurwitz & Associates Senior Analyst. ThereforeCIOs must expand their efforts to move their organizations from using only traditional BI that addresses descriptive analysis (what happened) to advanced analytics, which complements by answering the “why,” the “what will happen,” and “how we can address it, says the research firm.
As Gary Drenik, CEO of Prosper Insights & Analytics, states in an Forbes article, “No one can personally be expected to go out and spend the requisite time with consumers. However, what is needed is a simple process updated regularly to provide this intelligence.”
New advanced analytics platforms and applications, some of which can be carried on mobile devices, can offer ongoing intelligence on how much a company’s customers are planning to spend, how they shop competitors, how to influence more purchases, how the economy is impacting them and much more.
“Where we’re really seeing catch on is predicting consumer behavior,” Kirsch says as he believes that advanced analytics can span across business verticals. According to him, farms are leveraging advanced analytics to provide more insight into when to plant, how to optimize crop yields and when to harvest. Manufacturers are turning to advanced analytics to predict any failure so they can perform preventative maintenance before a failure causes expensive unscheduled downtime. Likewise, financial services firms are leveraging the technology to combat internal and external frauds, and so on. The use cases are infinite, he mentions.
For Gartner, advanced analytics and data science go hand in hand. That’s because advanced analytics delves deeper to understand potential outcomes and evaluate how issues can be addressed. This kind of intuition uses mathematical principals, intelligent algorithms, data mining and granular data analysis. Armed with that data, a firm can identify when they can capitalize on those outcomes and predict future impact.
Linden notes the opportunities in advanced analytics and data science technologies are enormous and growing. For example, the techniques help determine how to acquire new customers, do more cross-selling and predict demand and failures. Normal business intelligence and descriptive analytics and even traditional software engineering, can’t handle those situations.
These analytics are derived by integrating reliable datasets from various sources and can even be integrated with internal data to gain new predictive insights never seen in the past. They are an important tool for developing sustainable revenues and profits through organic growth.
A bright outlook
MarketsandMarkets forecasts the advanced analytics market to grow from $7.04 billion in 2014 to $29.53 billion in 2019 at a Compound Annual Growth Rate (CAGR) of 33.2% during the forecast period 2014-2019.
While businesses across industries are looking to optimize data to drive innovation and revenue growth, the growth of big data has further prompted them to deploy analytics to scale with the expansion of their business. One thing CIOs are realizing is that thier firms cannot afford to waste time and budget on mistakes as the biggest challenge for IT professionals dealing with big data is finding the solutions that integrate and align that data with actionable insights.
Experts believe that with Big data on the rise, and advanced analytics taking center stage in helping firms reach their business goals, CIOs can respond to changes faster by taking advantage of these emerging opportunities in the coming days.
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